Default retirement age: Government announces date to scrap DRA

The default retirement age (DRA) will be scrapped on 1 October 2011 under proposals announced by the Government today (29 July).

The new plans allow for a six-month transition from the existing Regulations, following the announcement in the Budget that the DRA would be phased out from April 2011. Currently employers can force staff to retire at the age of 65 regardless of their circumstances.

The proposals state that from 6 April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6 April and 1 October, only people who were notified before 6 April, and whose retirement date is before 1 October can be compulsorily retired.

After 1 October, employers will not be able to use the DRA to compulsorily retire employees; if they wish to use retirement ages they will have to be able to demonstrate that these are objectively justified. Examples could include air traffic controllers and police officers.

The consultation also proposes to help employers by removing the administrative burden of statutory retirement procedures. With the DRA removed there is no reason to keep employees’ “right to request” to work beyond retirement or for employers to give them a minimum of six months’ notice of retirement.

Employment relations minister Edward Davey said: “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swiftly to end discrimination of this kind.

“We are committed to ensuring employers are given help and support in adapting to the change in Regulations, and this consultation asks what kinds of support are required.”

Rachel Krys, campaign director at the Employers Forum on Age, said: “This is an incredible leap forward in employment practices and great news for individuals. Employers have nothing to fear from this change. This is an outdated policy and the removal of forced retirement is an opportunity to put policies and processes in place which make the most of an age diverse workforce.”

The consultation asks what additional support is required for individuals and employers in managing without the DRA or statutory retirement procedure. This includes the possibility of future guidance or a more formal code of practice on handling retirement discussions.

Views are also being sought on whether removal of the DRA could have unintended consequences for insured benefits and employee share plans.